Import duties in 3 steps

26 July 2023

Based on a number of factors, import duties are calculated for your freight. Do you think it sounds complicated? That’s understandable. For many importers, the process is not always clear. Our customs brokers, on the other hand, know all the ins and outs. That’s why we are happy to explain to you how import duties are calculated in just 3 short steps!

Step 1: What is the customs value of your goods?

It all starts with you, the shipper. The import duties you will be charged are calculated based on the customs value. The customs value is determined by adding up three factors:

• Transportation costs to the Dutch port of arrival
• Value of goods
• Cost of insuring the goods

The customs value is also called the CIF-EU border price. CIF stands for Cost, Insurance, Freight. This includes all of the above costs up to arrival in the Dutch port. You then pay a certain percentage of import duty on this customs value.

Step 2: how do we calculate it?

What is your commodity type code? It determines the amount of the import duty rate. In short, all goods imported or exported have their own commodity code. Each code is associated with a certain percentage of import duties. That means this percentage is never negotiable. Please note that you are responsible for providing the correct commodity code. Need help? Our team is happy to help you.

Let’s explain it to you through two examples. Suppose you import men’s cotton shirts from China. You will be charged 12% import duty on this type of product. In the examples below, the value of the goods and the cost of insurance are the same. Only the transportation costs differ. What amount of import duty is charged?

Example 1

Cost of transportation: €5,000

Value of goods: €4,900

Cost of insurance: €14.70

The customs value is €9,914.70.

How much import duty do you pay?

12% of €9,914.70 = €1,189.76

Example 2

Cost of transportation: €2,000

Value of goods: €5,000

Cost of insurance: €15

The customs value is €7,015.

How much import duty do you pay?

12% of €7,015 = €841.80

In example 1, you will be charged a higher amount (€347.96 extra) than in example 2. You can see that the customs value increases because the transportation costs are higher. In short: higher freight rates lead to higher import duty costs.

Please note: You always pay the customs value in euro. Is your invoice stated in a currency other than euro? Our customs specialists will calculate this using the monthly set currency rates.

Step 3: What are your responsibilities as a shipper?

In order to calculate the correct import duties, it is important for both Customs and our Customs brokers that the current value appears on the invoice. If no realistic amount is stated, then they are unable to process the invoice. If you are unsure about what else to include on your invoice, check out our checklist here.

Unfortunately, our brokers also often encounter ‘Free of Charge (FOC)’ stated on an invoice. Often, this is entered by a supplier to settle a previous mistake or settlement. However, because FOC does not represent a realistic value, it is never sufficient for a calculation. This is why we advise you to discuss it with your supplier should you see this on your invoice.

Any more questions?

The process can be quite tricky in some cases, so it would be far from surprising if you still have questions. Feel free to contact our customs brokers Randy, Gijs and Ilona. You can reach them by phone 010-7671000 or by email.